New To Federal Contracting?  Or, Just Have New Problems In Government Contracting?

Delegation of Authority and Notifications

By Kay Kendall

Competition for construction contracts in the private and non-government sectors has been increasing. Contractors that previously never considered federal government projects are starting to enter the federal construction arena.

Government money.  Construction contracts.  Put existing workforce to work instead of laying them off.  Increase revenues.  Sounds simple, right?  Not necessarily!

What many of these contractors are finding is that contracting with the federal government is a whole other ball game.   The government has its own set of regulations that are strictly followed and enforced.  Phrases like “good enough for government work” used to mean a high standard, but in the commercial world of construction today, it means barely good enough to get by.  Barely good enough to get by in commercial construction will probably not meet today’s government standards.

Problems arise on government projects, just like on any other project.  The difference on government projects is that you have to follow the government’s rulebook – the FAR (Federal Acquisition Regulations).  The FAR is a complex set of regulations that are often difficult to interpret.

In federal contracting, complex issues arise.  Remember the old saying, “I’m here from the government and I’m here to help?”   Don’t believe it.  The government is not there to solve your problems and rarely will you get genuine assistance.  They have certain procedures they have to follow, and even their “language” is different.  They speak in acronyms and have their own terms.

In this article, we will discuss delegation of authority and notifications.

One of the first things contractors need to know is who in the government has authority to direct the contractor.  Usually at the beginning of the contract, or in the preconstruction conference, the contracting officer will provide letters of delegation of authority.  These letters will provide the person’s name, their title and specifically what they have the authority to do.

Some can just review submittals and pay requests and make recommendations to their superiors.  Others have authority to obligate the government to a financial liability, and those that do have the authority have a dollar limit to which they can obligate the government.  Many contractors get into trouble by taking comments from a government field representative, performing the work and not getting paid.  Because the contractor did not notify the contracting officer or another person with financial authority, the contractor performs the extra or changed work at its own risk.

If the contractor receives a directive that it believes is a change to the contract, or encounters what it believes is a differing site condition, the contractor is required to provide written notification immediately before the work and/or the schedule is impacted, and certainly before any work is performed regarding the directive.

It is important to notify the contracting officer.  Even though contractors communicate with the contracting officer’s technical representative (COTR) or other site personnel, the contract requires the contractor to notify the contracting officer – the one in ultimate authority.  The notice is also important because if, for example, the differing site condition may result in significant costs or delays, the government must be given the option to make a decision about the situation.  For example, the differing site condition may present a problem that can’t be corrected with the funds in the contract, and a termination for convenience may be in order.

Or it may take some time to resolve, and in order to keep costs down the contracting officer may order a suspension of work until they work out the problem.  Of course the government has the option to deny that a differing site condition exists and direct the contractor to continue the work.  At that point, the contractor has notified the government per the contract and should send a letter to the contracting officer stating that it disagrees but will continue the work and submit a Request for Equitable Adjustment (REA) or a claim at a later date. In a future post we will discuss REAs, Certified Claims and what the difference is between them.

Kay Kendall is currently president of Kendall-Dinielli Consulting, providing consulting services to government and commercial clients.  She has extensive experience in preparing requests for equitable adjustment proposals and claims for government construction contractors.  She has also consulted Contractors with DCAA audits and resolving audit disputes. You can visit Kendall-Dinielli Consulting at www.kendall-dinielli.com.

Vince – the blogger Reality Bite:  As a 17-year federal contractor our company has seen its share of REA’s, claims and audits; it is simply a part of doing business with the federal government. However, you can go a long way in helping your company successfully navigate these issues if you simply become an expert at understanding the requirements of the specific federal contract you are working on.  We go as far as breaking down the entire contract into a chart that focuses on the who, what, when, why and how of a contract. Try it and it will help you avoid getting into trouble.

The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2014 TMV, LLC (Triune).  Any and all rights reserved.